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THE AMERICAN JOBS ACT

The purpose of the American Jobs Act is simple: to put more people back to work and make sure working Americans can hold onto more of what they earn—without adding a dime to the deficit.

The plan has five main components:

  1. Tax cuts to help America's small businesses hire and grow
    • Cutting the payroll tax cut in half for all businesses: This provision would cut the payroll tax in half for employers on their first $5 million in payroll, providing broad tax relief to all businesses and focused relief on the 98 percent of businesses with less than $5 million in payroll.
    • Temporarily eliminating employer payroll taxes on wages for new workers or raises for existing workers: The President's plan will completely refund payroll taxes for firms that increase their payroll by adding new workers or increasing the wages of their current workers, up to $50 million in new wages above the previous year. The Congressional Budget Office has called this kind of measure one of the most effective of all tax cuts in supporting employment.
    • Extending 100% expensing into 2012: The President is proposing the largest temporary investment incentive in history, allowing all firms—large and small—to take an immediate deduction on investments in new plants and equipment.
  2. Initiatives to put workers back on the job while rebuilding and modernizing America's infrastructure
    • Tax credits for businesses that hire veterans: The President has introduced a "Returning Heroes" tax credit of up to $5,600 for businesses that hire veterans who have been unemployed for six months or longer and a "Wounded Warriors" credit of up to $9,600 for businesses that hire veterans with service-connected disabilities who have been unemployed for six months or longer.
    • Investing in teachers, police, and firefighters: The American Jobs Act will invest $35 billion to prevent up to 280,000 teacher layoffs and $5 billion to support the hiring of first responders and public safety personnel.
    • Modernizing at least 35,000 public schools across the country: The plan will provide support for new science labs, internet-ready classrooms, and renovations at schools in rural and urban areas.
    • Immediate investments in infrastructure: This provision will help modernize our roads, railway systems, airports, and waterways while putting hundreds of thousands of workers back on the job. The President's plan will also create a National Infrastructure Bank, based on a model that has earned bipartisan support, to direct federal funding for these projects.
    • Putting people back to work rehabilitating homes, businesses, and communities: "Project Rebuild" will leverage private capital to connect people looking for work with projects in distressed communities.
    • Expanding access to high-speed wireless: This initiative will help to deploy high-speed wireless services to at least 98 percent of Americans, including those in more remote rural communities, while freeing up spectrum and creating a nationwide, interoperable wireless network for public safety.
  3. Pathways back to work for Americans looking for jobs
    • The most sweeping reform to the unemployment insurance program in 40 years: The President's plan will extend unemployment insurance to prevent 6 million Americans from losing their benefits while looking for work. These reforms will prevent layoffs and give states greater flexibility to use unemployment funds to best support job-seekers through:
      • Work-sharing: The President will expand "work-sharing" to encourage arrangements using unemployment compensation to keep employees on the job at reduced hours, rather than laying them off.
      • A new "Bridge to Work" program: The plan builds and improves upon innovative state programs that help displaced workers retain UI compensation while engaging in volunteer work or pursuing on-the-job training.
      • Innovative entrepreneurship and wage insurance programs: States will be empowered to use wage insurance programs to help older, long-term unemployed workers return to work in new industries, and to launch programs that make it easier for unemployed workers to start their own businesses.
    • Tax credits for hiring long-term unemployed workers: The American Jobs Act would provide tax credits up to $4,000 to employers who hire workers who have been unemployed for at least six months.
    • Prohibit discrimination against unemployed workers: The President's initiative would prohibit discrimination against unemployed workers when they apply for new jobs.
    • Investing in low-income youth and adults: The President's plan offers an aggressive strategy for expanding employment opportunities in these communities through subsidized employment, innovative training programs, and summer and year-round jobs for youth.
  4. Tax relief for every American worker and family
    • Cutting payroll taxes in half for 160 million workers: The President's plan will expand last year's tax cuts to cut workers' payroll taxes in half in 2012—resulting in a $1,500 tax cut to the average American family without negatively impacting the Social Security Trust Fund.
    • Helping more Americans get low interest rates for mortgages: The President has instructed his economic team to work with Fannie Mae and Freddie Mac, their regulator the FHFA, major lenders and industry leaders to allow more Americans to refinance their mortgages at today's low interest rates, for a potential savings of up to $2,000 per year.
  5. Long-term deficit reduction
    • The American Jobs Act is fully paid for as part of the President's long-term deficit reduction plan. The President's detailed deficit reduction plan will pay for every penny of the American Jobs Act and include additional reductions to stabilize our country's debt.

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